Digital Health Is the euphoria justified?
December 2020
Digital Health Is the euphoria justified?
Adrita Bhattacharya-Craven, The Geneva Association
In collaboration with Adam B. Cohen, Johns Hopkins University Saira Ghafur, Imperial College London
Digital Health: Is the euphoria justified? 1 The Geneva Association
The Geneva Association was created in 1973 and is the only global association of insurance companies; our members are insurance and reinsurance Chief Executive Officers (CEOs). Based on rigorous research conducted in collaboration with our members, academic institutions and multilateral organisations, our mission is to identify and investigate key trends that are likely to shape or impact the insurance industry in the future, highlighting what is at stake for the industry; develop recommendations for the industry and for policymakers; provide a platform to our members, policymakers, academics, multilateral and non-governmental organisations to discuss these trends and recommendations; reach out to global opinion leaders and influential organisations to highlight the positive contributions of insurance to better understanding risks and to building resilient and prosperous economies and societies, and thus a more sustainable world.
The Geneva Association—International Association for the Study of Insurance Economics Talstrasse 70, CH-8001 Zurich Email: [email protected] | Tel: +41 44 200 49 00 | Fax: +41 44 200 49 99
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December 2020 Digital Health: Is the euphoria justified? © The Geneva Association Published by The Geneva Association—International Association for the Study of Insurance Economics, Zurich.
2 www.genevaassociation.org Contents
Foreword 5
1. Executive summary 6
2. Introduction 9
3. The digital health landscape 12 3.1. The momentum behind digital health 12 3.2. What does the digital health mass market offer? 13 3.3. How are consumers using digital health? 17
4. The hype versus the facts 18 4.1. Does digital health lead to healthier behaviour? 18 4.2. Does digital health lead to better health outcomes? 20
5. Digital health: Relevance for health and life insurers 22 5.1. A value chain perspective 22 5.2. Online survey results 25 5.2.1. Digital health strategies and opportunities 25 5.2.2. Current digital health platforms 26 5.2.3. Digital health influence across the value chain 27 5.2.4. Barriers to digital health 29 5.2.5. Risks of digital health 31
6. Recommendations: Where to go from here? 32
7. Closing remarks 35
References 36
Digital Health: Is the euphoria justified? 3 Acknowledgements
This publication is a product of the Health and Ageing work stream of The Geneva Associa- tion, co-sponsored by Thomas Buberl, CEO of AXA, and Michel Khalaf, CEO of MetLife.
We are very much indebted to the members of the Working Group, established in support of the research activities of our Health and Ageing work stream, with special thanks to an advisory group, namely Piet Maree (AIA), Joanna Richardson (AXA), Dr Leena Johns, MAXIS GBN (MetLife) and Achim Regenauer (PartnerRe), who guided the development of this report.
In addition, we want to extend our deepest gratitude to all key contributors who helped craft key sections of the report, as well as all survey respondents who provided us with the richness of the data.
Contributors include: Achim Regenauer (PartnerRe), Konstanty Owczarek (AIG), Dennis Noordhoek (The Geneva Association), Somesh Chandra (AXA) and Ellie Cole (UCL).
Insurer survey respondents include: AIA; AIG, U.S.; AXA, Hong Kong; AXA PPP, U.K.; Ping An; Dai-ichi Life, Japan; DKV, Germany; DKV, Spain; MetLife; Nippon Life; and Prudential Financial.
Provider survey respondents include: Daniel Nathrath (Ada Health), Jean Kramarz (AXA Partners), John Korangy (Care Clix), Antonio Sek (Chiron Healthcare Group), Rosaline Chow Koo (CXA), Peter Ohnemus (Dacadoo), George Baptise (DocDoc), Paul Tambeau (Doctor Care Anywhere), Lu (Lucy) Sun (Ping An Healthcare And Technology Company Limited/Good Doctor), Andrew Smith (Grameen Digital Healthcare Solutions, formerly Telenor Health), Group Fit Ventures, Mark Wauton (Global Gene Corp), Paul Feldhausen (Holmusk), Yaron Savoray (KHealth), Kauri Onguchi and Dora Lam (Neurotrack), Tetsuya Nojiri (Oishi Kenko), Jonathan Lau (Pedder Health), Adam Odessky (Sense.ly), Magdalena Llavallol (ÜMA Health) and Y.C. Tsang (UMP Healthcare).
4 www.genevaassociation.org Foreword
For the enormous hardship that the COVID-19 pandemic has brought to the world, there are a few silver linings if we look closely. Many industries, for example, achieved accelerated digitalisation as a result of people moving to virtual interactions in their professional and personal lives. Healthcare was one of these industries, and its digital transformation was long overdue.
Digital health, with the prospects that it can increase the accessibility and affordability of healthcare, is attractive for individuals, health providers and insurers alike. The research for this report was carried out during a period of sharp and significant growth in the digital health market. Projected increases on the supply and demand sides actually continued to rise throughout the research process.
Our research has found, however, that popularity and promise do not guarantee clear, positive, health or financial outcomes. During this period of incredible evolution of the digital health market, healthcare providers as well as payers, like insurers, must prioritise strategies that harness digital health for the benefit of society.
This will require a deep investment into understanding the gaps in digital health, such as obstacles thus far to reaching older populations, and how to address them going forward. There are daunting challenges surrounding data – how to integrate data across businesses and the looming issue for insurers of gaining and retaining customer trust. We are pleased to put forward recommendations in this report to help guide insurers on their digital health journeys.
Paradoxically, our health systems, perhaps now more stressed than ever, have the potential to soon be more advanced than ever. Insurers should seize this opportunity to contribute maximum value to the physical and mental health of their customers.
Jad Ariss Managing Director
Digital Health: Is the euphoria justified? 5 1. Executive summary
Digital health is already a multibillion dollar market and its growth is expected to continue at an increased rate in the coming years. In general, this growth has been spurred by factors including: improved access to affordable care; rising consumer expectations in a tech-enabled environment; and efforts to control the spiralling costs of care. More recently, the catalytic effects of COVID-19 have further accelerated the uptake of digital health. It is therefore timely for the insurance industry to take stock of its current strategy for digital health and understand how it can be harnessed to support global goals towards improved and equitable healthcare.
This report starts by outlining the landscape of the digital health market, focusing on popular consumer-centric solutions as opposed to provider- or payer-centric ones. Subsequently, the impact of digital health on health behaviour and outcomes is explored, and practice, perceptions and strategic considerations for the health and life insurance industry are elaborated upon.
The availability of detailed information on the supply-side characteristics of digital health varies by product and region, but there are common headline characteristics:
• Mobile apps have created a microcosm in the digital health market. A report by IQVIA in 2017 estimated that 200 health apps are published every day, often with limited regulatory oversight. Wellness apps dominate, but apps for specific health conditions have gained in importance in recent years. However, less than 50 health apps have been downloaded more than 10 million times, suggesting widespread fragmentation in the app market. Mental health, diabetes and cardiovascular diseases (CVDs) are the most popular intervention areas.
• Globally, the use of telemedicine has risen rapidly, triggered by the COVID-19 pandemic to provide round-the-clock consultations and advice on routine ailments. According to a report by McKinsey, in the U.S. alone, 46% of consumers now use telehealth compared to just 11% in 2019. In contrast, and beyond COVID-19, telemedicine interventions in Europe have a strong focus on health conditions such as CVDs, diabetes, chronic obstructive pulmonary diseases (COPDs) and obesity.
• Asia’s share of the digital health market is on the rise. Funding has doubled from USD 808 million in the first quarter to USD 1,663 million in the second quarter of 2020. China is leading the way, with a sharp rise in telehealth seen during recent months. Countries with fewer resources across Asia and Africa have adopted digital health in areas ranging from financial protection to primary healthcare, often aided by a growing penetration of mobile phones.
Digital health is often seen as an antidote to the problems arising from inactive lifestyles. Mobile apps, sensors and fitness trackers promise long- term behavioural change and are most effective when they incorporate the key ingredients of behavioural change techniques (BCTs). However, a survey of mobile apps aimed at the wellness market found that few contained a
6 www.genevaassociation.org balanced spectrum of BCTs. While there is some Online survey evidence of positive behavioural change when digital health is paired with incentives, tools such as The findings from an online survey of 11 insurance gamification and nudges appear to have mixed results. companies and 20 digital health providers are congruent Self-selection of the young and healthy, omission of with those of the desk research. Most respondents have a the elderly and sustaining behavioural change in the strategic focus on increasing market share and improving long run are all challenges. distribution and consumer experience. Most insurers see digital health as a way to tackle non-communicable diseases (NCDs), but very few respondents indicate its The evidence on whether digital usage for strategic data analytics to influence premiums, health improves health behaviour and underwriting or claims. Most platforms across insurers and providers focus on populations under the age of 55, which outcomes is inconclusive. While there may bode well in the long term but does little to address are indications of its effectiveness in the current cost drivers arising from ageing, comorbidity and fragmented services. some areas, more needs to be done to grow the body of research, with a focus Reimbursement to digital health providers by third-party payers, including insurers, appeared to be polarised. on high-risk and high-cost groups. Providers either indicated that most of their revenue generated from such a source, or very little. Fee-for-service appeared to be the most prevalent payment method, also The high-level evidence of the impact of digital health mirroring findings from the literature. This raises three on physical and mental health outcomes is also concerns: firstly, there is a lack of quality vetting available mixed. Some studies show improvement when it is for digital health products that are directly targeted at used for the treatment and management of certain consumers without the scrutiny of a third-party payer; chronic health conditions. Telemedicine fared better secondly, there are ramifications for potential cost than products such as sensors or mobile apps and is inflation in health systems due to increased out-of-pocket understandably more conducive to complex health expenses by consumers; and thirdly, there is little incentive conditions that require in-person intervention instead for providers to moderate the overall volume of services in of general software. In a study of 73 mental health a purely fee-for-service environment. apps, only two backed their claims with credible evidence. The use of an online-offline mix of care is associated with better results when paired with Survey results revealed that there is incentives. However, incentives to promote better limited uptake of digital health across behaviour and outcomes lag behind, with the majority of initiatives focusing only on discounts and gadgets. the insurance value chain, minimising There are only a handful of examples where digital the potential for broader impact. health is used as a means to lower premiums, co- payments or aid consumer life cycle planning to While two thirds of insurers feel that encourage long-term and more holistic consumer digital health offers the services they engagement. Generalisation of the available evidence is difficult in high-cost disease areas as studies are need, almost all providers indicate often conducted in healthier populations or are that it has not yet been optimised to small scale. Furthermore, evaluation standards vary tackle consumer needs holistically. considerably. Finally, outcome data may be directly influenced by the lack of programme longevity.
Upon examining the nature of digital health utilisation The survey also revealed that there is limited uptake of across the insurance value chain, from purchase to claims, digital health across the insurance value chain, minimising it appears that effort is concentrated in marketing and the potential for broader impact. While two thirds of insurers distribution. While there are innovations further down feel that digital health offers the services they need, almost the value chain in areas such as underwriting and claims all providers indicate that it has not yet been optimised to processing, many have not yet achieved scale. Issues tackle consumer needs holistically. Both insurers and providers surrounding data interoperability and fee-for-service mentioned challenges associated with the availability of reimbursement leading to misaligned provider incentives resources to accelerate digitalisation, the lack of prioritisation significantly curtail insurers’ ability to use digital health of digital health, difficulty changing mindsets, legacy systems more strategically. (the lack of data interoperability) and readiness in distribution channels as common barriers. In addition, providers
Digital Health: Is the euphoria justified? 7 specifically highlighted that inadequate reimbursement • Align payment incentives for digital health. Digital for products and misaligned incentives pose problems health providers already have strong incentives to for scaling up initiatives. Both insurers and providers innovate in order to sustain themselves in a dynamic underscored the need to improve consumer trust and market. If these providers also begin to share some find ways to include older cohorts. They also emphasised of the risks of rising health costs through value-based the risks posed due to the lack of data governance and reimbursement methods rather than just fee-for-service, cybersecurity issues. they may be incentivised further to develop more efficient service offerings. These offerings could aim to Recommendations encourage the integration of wellness and management initiatives across a wider population segment. Based on the above findings, we propose six ways in which insurers, at the company and industry level, can shape • Prioritise trust through voluntary charters. the digital health market to optimise its societal benefits The growth of digital health is largely dependent alongside realising new business opportunities. on the willingness of consumers to share private data. While regulation is critical to improving data • Articulate a holistic digital health strategy. At governance, and many examples already exist, there present, there is no comprehensive vision that remains a grey area concerning mobile apps. Building articulates how insurers need digital health and consumer trust in digital health will require a more vice versa. Its deployment is mostly motivated by personalised approach and softer, consumer-centric marketing, distribution and sales, reflecting a narrower action. Alongside regulation, country-, regional- or form of consumer engagement to ensure (re)purchase. even global-level voluntary industry charters could There is limited insight into whether it is being used be a starting point for agreeing on some ground rules systematically to address cost drivers, lower premiums related to privacy, transparency, societal well-being and claims and extend coverage to those at risk or in and accountability. Such charters could also be used need of care. A more holistic appraisal of the business as a platform to involve, sensitise and communicate and societal opportunities that arise from digital health with consumers and to help endorsing companies for health and life insurers is needed to ensure its stand out from the crowd. readiness to tackle the risks emerging from rapid global epidemiological and demographic shifts. • Recognise organisational context and improve capacity. While the industry recognises the importance of health and wellness data for consumer The insurance industry can drive digital impact and product design, each insurer’s position on health toward impactful products and its path to digital transformation will need to inform specific goals, approaches and timelines in order to set services through its purchasing power. realistic expectations. Organisational impediments and Insurers can move away from being support systems need to be considered, and dedicated investment to improve capacity may be required before reactive risk managers or simple claims engaging with wider health system stakeholders. For payers to actively supporting insureds instance, data governance limitations and issues related to interoperability would no doubt require collaboration in managing their health. with governments and providers. However, as a starting point, the industry and individual insurers will need to assess problems and crystallise their views on the • Marshal the evidence prior to purchasing digital desired solutions internally before initiating an external solutions. The insurance industry can drive digital conversation. health toward impactful products and services through its purchasing power. Insurers can move away • Create a digital health marketplace. The health from being reactive risk managers or simple claims and life insurance industry can unlock significant value payers to actively supporting insureds in managing by creating a digital health marketplace, in collaboration their health. There are two factors involved in achieving with others, that brings relevant digital and in-person this goal. Firstly, investment is needed in detailed solutions together, with outcomes, quality and claims analysis so that digital services can be targeted affordability at the core. This shared marketplace can at the right population cohort, such as the high risk facilitate a much needed dialogue across companies or elderly, to achieve improved health and financial and encourage rationalisation of products by creating outcomes. Secondly, the industry can work with digital common standards (e.g. a health outcomes database), health companies and academia to develop standards effectively leveraging experiences and having a unified for evaluating digital health products to inform any voice while working hand-in-hand with governments on investments and commissioning of services. crucial topics like data and security.
8 www.genevaassociation.org i 2. Introduction
A 2017 Lancet study projected global healthcare expenditure to rise from USD 9 trillion to USD 24 trillion in the space of 25 years (2014 to 2040).1 The world will be short of 18 million health workers by 20302 and, by 2050, 16% of the global population will be over the age of 65, a cohort that has already outgrown the number of children under five years old in recent years. These demographic shifts and the resultant rise in chronic illnesses, coupled with the ongoing pandemic and squeezed public budgets, mean health needs are unlikely to be met solely by a brick-and-mortar health system. As such, digital health is seen by many as the solution to creating health systems that are agile, efficient and fit for the future.
As a result of demographic shifts, the rise in chronic illnesses, the ongoing pandemic and squeezed public budgets, health needs are unlikely to be met by a brick- and-mortar health system. Digital health is seen by many as the solution to creating health systems that are agile, efficient and fit for the future.
In a recent survey led by Roland Berger3 of leading healthcare experts, 50% of respondents thought insurers are likely to face the second biggest business model disruption from digitally-powered health platforms, trailing only behind physician and outpatient service models. Insurers and payers overall have been slow to adopt digitalisation compared to other sectors4,5 and most digital health solutions currently target consumers directly. Even though the status quo is starting to change as more health and life insurers look to harness this nascent market to diversify their product line, grow their consumer base, improve customer experience and counter the effects of low interest rates, some important gaps remain in evidence and practice.
Firstly, like many health systems, the digital health market remains fragmented. The difference between lifestyle and medical information is increasingly blurred. There is a noticeable silo between digital health that targets the healthy versus those living with more complex conditions, with little integration between the two. The uncurated nature of the market means that the onus falls on consumers to choose solutions, often with limited information. Efforts to narrow this informational asymmetry and steer the market towards efficacious and holistic solutions remain poor.
Secondly, a 2019 survey showed that just 3% of global health and life insurtech engages in pooling risks. The vast majority represents technology firms that focus on providing software to life and health insurers.6 Others point out that the application of digital solutions in health and life insurance is skewed towards upstream functions such as sales and distribution (Figure 1).7 Hence, evidence of the effects of digital health on high-cost consumers and the consequent effects on premiums or claims remains modest. For instance, a study of 4.5 million people in the Netherlands by Whamms et al.8 showed that the top 1% of high-risk users
Digital Health: Is the euphoria justified? 9 Box 1: Digital health: Why do we need to take stock now?
An uncurated space: The onus falls on consumers to choose appropriate solutions with little information about efficacy. Does the industry address this information asymmetry?
Lack of a holistic strategy: Evidence of the effects of digital health on premiums and claims remains modest. Does the industry have a comprehensive vision?
Conditions of scale up are absent: Scaling credible solutions is challenged by the lack of capacity, payment incentives, external barriers and ethical considerations. How can insurers address this both individually and collectively as an industry? consumed over a fifth of all care. Similarly, in the U.S., 5% The dearth of literature appraising digital health from a of consumers utilised 50% of health resources.9 health and life insurance perspective suggests that a review of the industry’s need for digital health that balances the Thirdly, the conditions needed to scale up digital societal need for affordable healthcare with corporate interventions are challenged by capacity, the siloed nature objectives of growth and profitability is required. This report of health and life solutions, payment incentives and aims to tackle an early subset of questions pertaining to the regulatory and ethical considerations. It is not clear how scope of the digital health market that targets consumers, the industry plans to overcome these challenges. their effect on health behaviour and outcomes and consequent insurer strategy. To do so, a mixed methodology consisting of a review of academic papers, white papers A review of the industry’s need for and unpublished reports from Geneva Association (GA) digital health that balances the societal members is employed. This is supplemented with expert insights and a qualitative survey involving 11 insurers and need for affordable healthcare with 20 digital health providers to explore perceptions, gaps and corporate objectives of growth and opportunities. profitability is required.
Figure 1: Where do insurtechs focus? Number of innovations as % of total in the databasei Share of innovations in insurtech database <4% 4-10% >10%
P&C 8% 4% 17% 10% 7%
HEALTH 5% 3% 11% 8% 6%
LIFE 3% 2% 9% 5% 2%
Product Marketing Distributionii Pricingiii Claims development i ~500 commercially most well-known cases registered in the database (excluding wealth management-related innovations) ii Includes sales iii Includes underwriting and policy issuance
Source: McKinsey 2017
10 www.genevaassociation.org The expansive nature of digital health, varied definitions The remit of this report will be limited to the most and interchangeable terms used to describe it (e.g. common consumer-facing digital health tools, which m-health, e-health, connected health) and emerging are classified into four areas: wearables and biosensors concepts such as personalised medicine and digital to measure steps, heart rate, blood glucose etc.; therapeutics have created myriad interpretations of the survey-based tools to track mood and patient-reported topic. For simplicity, we broadly classify digital health from outcomes, often via mobile applications; education or the user perspective: digital delivery channels that directly reference portals to improve awareness or understanding target consumers; digital tools that target providers to of a given health condition; and telemedicine for remote organise care delivery, for example electronic health consultations and management of health conditions with records; and tools that affect the insurer/payer, such as a video or audio interface. It will subsequently reflect data-supported underwriting or data to monitor provider on how evidence and data from these tools are used by service patterns. Together they create an ecosystem insurers across the value chain. Areas such as smart pills, bound by cross-cutting functions ranging from artificial DNA testing kits or products that target providers will intelligence (AI) to ethics (see Figure 2). remain outside of the scope of this report.
Figure 2: An illustration of digital health by users
Consumer • Wearables and sensors • Mobile applications • Information portals • Telemedicine
Artificial intelligence Provider Data analytics Insurer/Payer • Electronic medical records Regulation • Marketing & distribution • Clinical decision support Incentives • Underwriting • Supply chain management Ethics • Consumer engagement • Workflow • Managing providers • Online training • Claims
Source: The Geneva Association
Digital Health: Is the euphoria justified? 11 3. The digital health landscape
3.1. The momentum behind digital health
The digital health market is set to grow from USD 103 billion in 2019 to USD 386 billion in 2025, a Compound Annual Growth Rate (CAGR) of 24.6%.10 This growth, among other things, may be explained by four factors.
• Accelerated access to affordable care: Vast amounts of healthcare needs are unmet. Over half the global population still lack access to basic health services, with as many as 100 million people being impoverished annually because of direct, out-of-pocket payments (OOPs) which represent more than a third of global spending.11,12 While countries are at different points on the Universal Health Coverage (UHC) spectrum, digital health is increasingly seen by many as one way to address such inequity through innovative service delivery channels that reach underserved communities with affordable care.
• A tech-enabled environment: Globally, five billion people own a mobile phone (over half are smart phones)13 and there are over a billion mobile banking accounts.14 Consumers live in a tech-enabled environment and expect more agility in how they receive services. Today, over three quarters of patients in the U.S. resort to online health information and about two thirds choose providers based on their reviews,15 thereby challenging the long-held perception of a paternalistic model of care between doctor and patient. Products such as wearables and mobile apps are empowering users towards wellness and self-care. A new breed of ‘Netflix’ health delivery platforms powered by AI chatbots and telemedicine are directly targeting consumers through a mix of online and offline care, and a handful of insurers are taking an active role in integrating health provision and making greater use of data analytics to offer more nimble and cheaper health coverage.
Digital health has become a crucial consideration in promoting the financial sustainability of health systems, with better targeting of interventions and reduction of unnecessary physical visits.
• Spiraling costs of care: According to the OECD, 20% of health resources are wasted.16 Digital health has become a crucial consideration in promoting the financial sustainability of health systems, with better targeting of interventions and reduction of unnecessary physical visits. As such, some health and life insurers are shifting their focus from pure financial protection and long-term savings products to wellness, prevention and disease management to keep risk
12 www.genevaassociation.org pools healthy while addressing cost inflation. Life startups in the U.S. alone amounted to USD 9.4 billion insurance in particular, which has historically played during the first three quarters of 2020,23 making it one an important role in financing lifestyle in retirement, of most funded periods for health innovation. has come under pressure, with low interest rates, people outliving their savings, rising rates of NCDs and depleting pension assets. (Digital) health is seen by Digital health has been at the centre of some as a way of attracting younger customers earlier the COVID-19 pandemic. Payers and with value-added services, while also promoting active ageing among existing policyholders. regulators have approved its utilisation at a pace not seen before and this • The catalytic effects of COVID-19: Digital health has been at the centre of the pandemic. It has become sudden pivot towards digital health an integral part of national contact tracing systems will no doubt lead to some structural and the inevitability and acceptability of digital health can be seen by the sharp rise in utilisation during the changes in health systems globally. ongoing crisis.17,18 In the U.S. alone, 46% of consumers now use telehealth compared to just 11% in 2019, with some predicting virtual channels could take on a fifth of all care, worth around USD 250 billion.19 3.2. What does the digital health mass 20 Similar surges have also been reported in the U.K. market offer? Payers and regulators, in a bid to adjust to these new realities, have approved the utilisation of digital health A variety of digital health products are available across at a pace not seen before.21 While COVID-19 will likely the care continuum (see Table 1). However, the level of continue to transform these realities, this sudden pivot granularity in the information available on digital health towards digital health will no doubt lead to some varies considerably by product and region. Hence, this structural changes in health systems globally. This is section will focus on global and, where possible, regional already manifested through the growth of online health headline characteristics, reflecting on the products that insurance sales in China, estimated to grow by 43% per are available, their focus and expected growth in selected year until 2025.22 Similarly, investment in digital health markets.
Table 1: The care continuum and digital health touch points
HEALTHCARE CONTINUUM Long-term management Wellness Prevention Diagnosis Treatment (professional & self-care)
Wearables p p
Mobile applications p p p p
Health information p p p p p portals
Telephone triage p
AI chatbot triage p
Point of care testing p p
Telemedicine p p p p (audio & video consults) PRODUCTS/DIGITAL CHANNELS PRODUCTS/DIGITAL Remote monitoring p devices
Text nudges & reminders p p p p
Source: The Geneva Association
Digital Health: Is the euphoria justified? 13 Mobile apps alone have created a microcosm in the digital – the overwhelming majority have been downloaded less health market. According to a report by IQVIA, there are than 5,000 times. currently over 318,000 health apps and 340 wearable products available globally and an estimated 200 health Among disease-specific apps, mental health, diabetes and apps are added to the market on a daily basis.24 Apps with CVDs are the most popular intervention areas (Figure 4).24, a a focus on wellness still dominate, making up over 60% of Another report points out that an estimated 50 million the market, but market share for those focused on specific people resort to such mobile apps for triaging services, health conditions increased from 25% to 36% in two years with symptom checkers being the most commonly-used (Figure 3).a Remarkably, however, less than 50 of these service.25 As discussed above, telemedicine services have apps have been downloaded more than 10 million times seen a rapid rise globally to tackle ab whole spectrum of
Figure 3: Mobile health apps by market share (%)b Wellness management
40 Exercise and fitness 30 19 Lifestyle and stress 19 13 Diet and nutrition 12
Health condition management 10 Disease specific 16 8 Women's health 9
7 2015 Medicine reminders/info 11 2017 2015 0 10 20 30 40 2017
Source: Adapted from IQVIA 2017
Figure 4: Breakdown of disease-specific mobile apps 28% Mental health and behavioural disorders
Other 1% Hematology 1% Kidney disease 1% Genitourinary system 1% Infectious and parasitic diseases 1% Skin and subcutaneous tissue 3%
Endocrine, nutritional, and 16% Diabetes metabolic diseases 3% Pain 4% 100% Eyes and ears 4% 1,749 Unique Apps Digestive system 4% Respiratory system 5% Cancer 5% 11% Heart/circulatory system 7% Nervous system 7% Musculoskeletal system and connective tissue
Source: Adapted from IQVIA 2017 a Figures 3, 4 and 5 show the latest data accessible from the public domain. b Note that the figures for 2015 and 2017 do not add up to 100% because a certain category of app has been excluded from the report.
14 www.genevaassociation.org care, ranging from consultation to management in the from blood pressure monitoring to elderly care, could COVID-19 context.26 grow by 8.6% annually to reach a total valuation of USD 17.5 billion by 2020. Regionally, the picture is a bit more nuanced. In the U.S., where chronic diseases drive 75% of health spending,27 Europe is estimated to account for 30% of the world’s mobile a study by Cohen et al.28 found that the majority of app market.31 The most prominent markets for mobile app digital health companies (73.2%) focused on disease developers are the U.K., Germany and the Netherlands, management. Less than a quarter (23.8%) tackled followed by some of the Nordic countries. A third of all apps prevention and just 13% focused on diagnosis, perhaps focus on mental health, after which diabetes, heart and one of the factors that explain healthcare cost inflation in circulatory diseases are the most popular. Telemedicine the U.S.c The authors also observed that general software solutions have a strong focus on tackling NCDs, with CVDs, products with no specific targeting of clinical areas were diabetes, COPDs and obesity topping the chart at 68%, the most common, followed closely by telemedicine. 52% and 49%, respectively (see Figure 5).32, a Biosensors and wearables were most prevalent for supporting general wellness. One explanation for the weakness in the wellness and prevention market could be Telenor Health attributed to reimbursement methods in the U.S., which prioritise the management of conditions.29 Telenor Health in Bangladesh offers an AI chatbot- supported telemedicine service to more than Although the lion’s share of digital health investment five million people. Initiated as a value-added in the Americas is focused in the U.S., nascent markets service to Grameenphone subscribers, the product like Brazil lead the way in the south. With the fourth offers patient triage and referral to a quality- largest smartphone market globally and nearly half of assured network of 1000+ providers, discounted its population sensitised to wearables, the stage looks consultations and microinsurance to customers to set for a virtual expansion of care in Brazil, closely protect them from catastrophic healthcare costs followed by Mexico.30 As such, commentators point for hospital stays. out that the Brazilian market for remote care, ranging
Babyl Figure 5: Digital health focus areas in Europe
70 68 Partners with the Rwandan government and the publicly-sponsored community-based health 60 insurance scheme to offer virtual consultations to
52 urban and rural beneficiaries. This virtual model has resulted in a noteworthy reduction in the cost 50 49 46 of care from USD 10–13 per face-to-face visit to 43 USD 1 for online consultations. On average, the 40 38 system deals with 2,000 appointments a day and has 600,000 users. (%)
30 Health systems and their capacities vary widely in many 20 Asian countries, making any broad generalisation on digital health difficult. However, the Asian digital health market has been particularly buoyant, despite the 10 COVID-19 crisis, with funding doubling from USD 808 million in quarter one to USD 1,663 million in quarter two 0 of 2020. China, where telehealth has seen a sharp rise in recent months, is leading the way.33 As much as 17% of CVD Other COPD mobile health apps now originate from Asia and Pacific Diabetes 34 Overweight
Comorbidity countries, suggesting a marked shift in the use of digital health over the coming years. Source: European Commission 2018
c The total may come to more than a hundred as some companies may focus on multiple areas.
Digital Health: Is the euphoria justified? 15 Countries on the lower-income spectrum across Asia and mobile penetration of 38%, 59% and 45%, respectively.35 Africa begin to share some characteristics. High OOPs, Today, the digital health markets in Africa and many weak health infrastructure, insufficient workforce and parts of Asia touch on all components of health systems, remote settings are some of the common pressure points including financial protection though mobile money,36 that have paved the way for digitalisation in these settings. wellness information, referral platforms for essential This has been possible due to growing internet and mobile services such as maternal and reproductive health37 and connectivity. For instance, emerging insurance markets AI-powered telemedicine dealing with primary care.38 such as South Africa, Kenya and Nigeria now have a
Figure 6: A growing interest in digital health across the Americas, Europe and Asia-Pacific regions (a) Reasons for using digital health Consumers are using technology and tools for various health reasons, with fitness and health improvement tools being the most frequently used Q. In the last 12 months, have you used any technologies including websites, smartphone/tablet apps, personal medical devices, or fitness monitos for any of the following health purposes?
Australia U.K. Canada Denmark Netherlands Germany Singapore U.S.
Measure fitness and health improvement goals (e.g. exercise, 40% 37% 43% 39% 37% 35% 53% 42% diet, weight, sleep) Monitor health issues (e.g., blood sugar, blood pressure, breathing 21% 21% 27% 21% 21% 24% 35% 27% function, mood) Receive alerts or reminders to take 17% 15% 20% 17% 19% 18% 21% 21% medication Measure, record, or send data about 13% 11% 15% 16% 19% 13% 21% 20% medication you are taking
Order a repeat prescription supply 18% 38% 29% 49% 36% 22% 16% 48%
Note: Charts shows percentage of respondents who said 'yes'
Source: Deloitte Center for Health Solutions 2019 Global Health Care Consumer Survey and 2018 Health Care Consumer Survey
(b) How do Asian-Pacific consumers want to receive healthcare in the future? 91% of consumers 70 would use digital 60 health services if the costs were covered 50 +73% +75% +52% +35% +6% +109% +23% +7% by an employer or insurance provider 40
30
20
10 Current Future 0 Telemedicine Self diagnosis Long-term Digital On-demand Online Health/life Lifestyle and apps illness repository health pharmacy insurance wellness management of personal services apps monitoring records Note: Percentage of consumers who indicated they would use a tool now or in the future, on the basis of the question: 'From the list of tools and system below, which (1) have you used in the past months, (2) would you use in the next 5 years if made available, or (3) have you not used and do not expect to use in the future?' and who answered yes to the question: 'If digital health services were covered by your insurance plan (if any) or your employer, would you be willing to use the services?'
Source: Bain & Company 2019
16 www.genevaassociation.org 3.3. How are consumers using digital health? There are doubts as to whether certain digital health products are In a 2019 consumer survey from eight mature markets across the Americas, Europe and Oceania,39 50% of reaching older cohorts, who have an respondents indicated that they use digital health to increased likelihood of developing improve overall wellness (Figure 6), echoing the global supply-side trends discussed above. On the modality comorbidities. of use, a more regionally-focused survey of European Union (EU) member states found that 53% of citizens sought health information online in 2019, with Finland Mirroring global and regional trends, a survey by Bain taking the lead.40 Parity in usage varied by age and was & Company44 across Asia-Pacific countries (Australia, especially stark when it came to the utilisation of mobile China, India, Indonesia, Singapore and Thailand) showed apps. In a survey of app utilisation of seven EU member that consumers increasingly place high value on wellness states (Austria, Bulgaria, Estonia, France, Germany, services (83%), convenience of use (80%) and the Italy and the U.K.),41 nearly three quarters of the survey availability of online information on health (74%). respondents (n = 4000+) did not use any health app, Furthermore, 70% of respondents expressed a preference and users disproportionately represented younger for a single entry point to manage their healthcare cohorts. This raises doubts about whether certain digital journey, with 28–59% of consumers showing a preference health products are reaching older cohorts, who have for this to be via a mobile app or smart device across the an increased likelihood of developing comorbidities and six markets. More importantly, 91% also expressed an the need to manage them. The surveys also indicated interest in using digital tools if integrated with insurance that while there is a growing understanding of the or employment benefits (Figure 6). importance of data sharing, data governance and trust remained key issues.42 The importance of trust in the ‘health data domain’ was also pointed out in a 2018 National Consumer Health Survey that showed only 11% of respondents would be willing to share health data with technology companies.43
Consumer perspective: The most prominent themes
Interest Convenience The level of appetite for digital The usage of digital health largely health exceeds 50% across most of matches supply, with a strong focus the surveyed population Consumer on lifestyle and wellness, and is driven by convenience perspective
Trust Integration Public concerns remain about digital Insurers and employers are seen as health data governance and trust critical catalysts for scalability globally
Digital Health: Is the euphoria justified? 17 4. The hype versus the facts
4.1. Does digital health lead to healthier behaviour?
Globally, 1.4 billion adults are at risk of worsening or developing chronic diseases due to inactivity, and levels of inactivity are over two times higher in high-income countries than low-income countries.45 Avoidable health risks connected to obesity, high blood pressure and smoking accounted for USD 730 billion, or 27% of total health spending, in the U.S. in 2016.46 Digital health is often seen as an antidote to this and has given rise to an era of the ‘quantified-self’ – data from wearables, sensors and mobile apps equip users with knowledge that allows them to take decisive steps to preserve their health and well-being. Consequently, they are able to play a part in any clinical decision making.47
Table 2: Behavioural change techniques in popular mobile apps
Behavioural change technique n Proportion Provide instruction on how to perform behaviour 111 0.66 Model/demonstrate the behaviour 88 0.53 Provide feedback on performance 83 0.50 Goal setting – behaviour 63 0.38 Plan social support/change 61 0.37 Information about others' approval 46 0.28 Goal setting – outcome 40 0.24 Prompt review of outcome goals 31 0.19 Set graded tasks 25 0.15 Provide information on where and when to perform the behaviour 18 0.11 Prompt self-monitoring of behaviour 17 0.10 Prompt self-monitoring of behavioural outcomes 16 0.10 Teach to use prompts/cues 11 0.07 Prompt rewards contingent on effort or progress toward behaviour 10 0.06 Prompt rewards contingent on successful behaviour 10 0.06 Aution planning 6 0.04 Information on consequences of behaviour to the individual 6 0.04 Prompting focus on past success 5 0.03 Information on consequences of behaviour in general 4 0.02 Stimulate anticipation on future rewards 4 0.02 Environmental restructuring 2 0.01 Normative information about others' behaviour 1 0.01 Relapse prevention/coping planning 1 0.01 Shaping 1 0.01
Source: Conroy et al. 2014
18 www.genevaassociation.org Mobile applications, sensors and fitness trackers are the post-intervention, representing a 59% improvement most common channels that promise to influence long-term over baseline scores. A study by Kurti et al.52 comparing behavioural change. They do this by incorporating an array the effects of digital health alongside monetary and of triggers that are either educational or motivational.48 non-monetary incentives on sedentary adults found Behavioural scientists suggest that digital technology that both intervention and control groups successfully works best to create favourable behavioural patterns when increased their step count by an average of 108%, though it incorporates the key ingredients of BCTs (examples are they observed that monetary incentives led to greater outlined in Table 2).d However, a survey49 of the 167 top improvements. Similarly, a study53 of 11,881 users in ranked mobile apps aimed at the wellness market found that the U.K. showed that short-term incentives in the form very few contained the balanced spectrum of BCTs identified of discounted cinema tickets, hot drinks etc. improved by the Coventry, Aberdeen and London–Revised (CALO-RE) annual activity days by 56%, with an impressive 554% taxonomy. This mirrors the findings by Mercer et al., who increase in low-activity users compared to 205% and 17% noted that just 16 of the 40 well-known BCTs were present in medium-activity and high-activity users, respectively. in some of the leading activity trackers in the market.50 This The study also noted a concomitant reduction in relative casts doubt on whether digital health can live up to its claim mortality risk of 7%, 5% and 3% in low-, medium- and of improving health behaviour as the novelty of using a new high-activity groups, respectively, with a sustained product starts to wear off. impact of these incentives two years post-intervention. Other studies exploring similar incentivised schemes Generally speaking, the most common mass market digital that included aspects of digital health found a positive health solutions incorporate one or more of the following uptake of preventative services, such as screening for BCTs. The evidence on their efficacy in changing as well as cholesterol, blood sugar and prostate-specific antigen, sustaining good health behaviour is less clear cut. mammograms,54 and healthier food consumption.55,56,57
BCTs in common mass market digital health solutions A more mixed picture emerges where information, feedback, habit-forming prompts and nudges are concerned. In an RCT in the U.S., Wang et al. found that while wearables were effective in increasing physical activity in obese and overweight adults, text prompts or nudges sent to intervention groups had little effect.58 However, personalised information through text messages in some contexts have facilitated greater uptake of reproductive Incentives: monetary health services among women.59 In the same vein, while Goal setting and non-monetary Information nudges have shown positive effects on user adherence to rewards medication,60 their long-term effects remain unknown.61
Disproportionate representation of the young and healthy in studies means the evidence on the effects
Peer support: of digital health on the behaviour of Feedback Habit forming challenges, competition etc. high-risk groups who stand to benefit Source: The Geneva Association most from the technology – the Goal setting and incentives provide more favourable elderly, sick or poorer members of evidence. A randomised control trial (RCT) involving society – is often limited. meat factory workers in New Zealand51 found that the participants who used a digital pedometer (compared to the other half who were just given educational materials) One persistent problem includes self-selection of users with the goal of increasing their weekly step count by who have a heightened awareness of wellness and 5% substantially improved their BMI, body fat and waist are able to afford digital sensors. This group may be circumference. The increase in step count remained disproportionately represented in studies compared with significant within the intervention group three months those who stand to benefit most from the technology.
d Table 2 shows the latest data accessible from the public domain.
Digital Health: Is the euphoria justified? 19 A survey of wearable devices showed 58% of owners were Tackling the emerging threat under the age of 35 years and more than a quarter (29%) earned over USD 100,000 a year.62 It is highly probable that of diabetes this digitally savvy and connected cohort are more likely In Japan, 10 million people are at risk of to respond positively to habit-forming and peer-supported developing diabetes. With people living longer, digital health products reliant on social media networks the rising cost of treating chronic illnesses or forms of gamification. With some exceptions,63 at this (including diabetes) and a depleting demand stage it may be reasonable to infer that there is limited for life insurance policies have compelled many evidence on the effects of digital health on changing and life insurers to innovate in order to add value sustaining healthy behaviour, especially among high-risk to the user experience and grow their market. groups, i.e. the elderly, sick or poorer members of society. In 2018, Nippon Life Insurance Company The extent to which these high-risk groups are represented embarked on its first journey to integrate a in studies is not always clear. Similarly, while some diabetes prevention service with its life insurance BCTs perform better than others, the body of evidence solutions. By building on its relationship with remains variable and it would be erroneous to form a 31 municipalities, the Wellness-Star trial definitive conclusion without more targeted research. The programme was launched with 1,000 public longevity of the effects of digital health among the clinical sector workers using Nippon Life hospital as a population has also been questioned by some,64 while launch pad to deliver services. Participants of the others have raised fears about the safety of the plethora programme received advice on diet, devices to of uncurated solutions available on the market65 and the monitor activity levels and biomarkers, as well adverse effects they may introduce, such as obsessive as remote counselling by a public health nurse. checking and a false sense of security.66 The trial lasted three months for each participant during the two-year research period and resulted in a notable improvement in average blood 4.2. Does digital health lead to better glucose levels from 105.7 at the beginning of the health outcomes? trial to 100.7 at the end. Building on this success, Nippon Life launched a full rollout of a diabetes As already discussed, NCDs and ageing are the two most prevention plan in July 2020. prominent drivers of cost inflation in healthcare.9, 49, 67, 68 As more insurers look to add value using digital health, appraising whether it makes a difference to costly care beyond prevention and behavioural change is key to Dementia prevention through informing future investment. The evidence on its impact on digital health health outcomes is highly variable. Neurotrack, in collaboration with Dai-ichi Life in Using a novel methodology to assess clinical impact by Japan, offers a novel tool to prevent and diagnose evaluating peer-reviewed studies, Safavi et al. found that Alzheimer’s and related conditions. Integrated just 27.9% of peer-reviewed studies on digital health in the with Dai-ichi Life’s dementia insurance, U.S. targeted high-risk and high-cost population cohorts Neurotrack enables policyholders to access a and a mere 8% focused on clinical effectiveness in high-risk cognitive test lasting 13 minutes and generate users.69 On efficacy, an audit of 23 symptom checkers by a brain score using an eye tracker integrated Semigran et al. found that their diagnostic accuracy stood with smartphones. This enables beneficiaries to at only 34%.70 The authors also pointed out that while they monitor any developments at regular intervals. were 80% effective in triaging users in emergency cases, The app also offers a resource centre for users their capacity to triage accurately in non-emergency and containing dietary advice, tools for stress self-care cases stood at only 55% and 33%, respectively. management etc. to address the environmental This variability is also supported by findings by Millenson factors associated with disease prevention. In the et al., who note that mobile apps for specialised services U.S., Neurotrack works with Prudential Financial such as inflammatory diseases performed poorly, with some to aid underwriting. exceptions for those that also used sensors.71
When it comes to the general treatment and management tool for lung cancer sufferers showed better survival rates of health conditions, a more favourable picture starts to through early detection and intervention,73 and a study of emerge, especially when intervention includes telemedicine. elderly patients in progressive care units (PCU) supported Evidence on clinical outcomes for the remote management by telemedicine in the U.S. showed notable improvement in of COPD is associated with an overall improvement in health PCU and hospital mortality, length of stay and costs.74 This when compared with the control group, with fewer visits to was supported by a systematic review by the U.S. Agency physicians and nurses.72 A digitally-enabled self-reporting for Healthcare Quality and Research, which also found
20 www.genevaassociation.org telemedicine to be associated with positive outcomes in areas A review of reports from the insurance companies such as remote management of cardiovascular or respiratory of GA members also confirmed this pattern. A mix diseases and behavioural health, although its effect in areas of teleconsultation, activity tracking and biosensing such as triaging was less obvious.75 Others have found positive for a diabetes prevention trial in Japan among 1,000 effects on asthma, diabetes, cancer and digestive disease civil servants showed improvement in blood glucose management,76 as well as obstetric and gynaecological levels in nearly 70% of the trial participants.79 A outcomes.77 A review by Beratarrechea et al.78 of digital health reward-oriented AIA Vitality programme incorporating in low- and middle-income countries covering interventions components of digital health in six Asian markets ranging from heart disease, asthma and diabetes management with 40,000 insurance policyholders who underwent also showed positive results on clinical outcomes. regular health checks showed consistent improvement in NCD-related biomarkers: 21% of policyholders saw an improvement in BMI, 53% in blood pressure, 39% in "As a group insurer, we are seeing cholesterol levels and 75% in blood glucose levels.80 that employers are increasingly Alongside physical illnesses, digital health that tackles opting for telemedicine to avoid cases mental health is also growing. In a study of 73 mental presenting in doctors’ offices. From health apps, Larsen et al. found that only one or two backed up their claims with credible evidence.81 The their perspective, it also has a direct authors also note that the most common claims had effect on absenteeism by bringing more little to do with clinical effectiveness and more about improving knowledge among users. More alarmingly, convenience to employees. In many a study of 69 mental health apps targeting depression parts of the Middle East, this has been and suicide prevention by Martinengo et al. found that a go to option because primary care six apps provided invalid crisis helpline numbers, some of which were downloaded more than two million infrastructure is still weak." (Insurer) times.82 These gloomy findings are countered by Chandrashekar who draws attention to a meta-analysis of 18 RCTs on 22 mobile apps focused on depression that found a positive effect on depressive symptoms.83 However, the effects were more pronounced in users with mild to moderate symptoms. The review also observed encouraging effects on anxiety when mobile apps were combined with face-to-face consultations, as well as managing the symptoms of schizophrenia, which was associated with improved adherence, user experience and broader clinical benefits. This favourable evidence is supported by findings from Batraand et al., who found mobile apps to have a positive effect on people with serious mental illness in the short term,84 and Kumar et al.85 in their 12 month pre- and post-pilot study that associated virtual mental health programmes with improvement in cognitive functions, depression and anxiety.
As for behavioural impacts, the evidence on whether digital health improves health outcomes is inconclusive. While there are indications of its effectiveness in the management of certain chronic and mental health conditions when combined with incentives and physical consultations, triaging capacity and diagnostic accuracy remain dubious. Similarly, the lack of research focused on high-risk and high-cost populations makes it harder to assess the long-term benefits to consumers and payers.
Smartwatch user
Digital Health: Is the euphoria justified? 21 5. Digital health: Relevance for health and life insurers
Having explored the evidence on the clinical effectiveness of digital health, in this section, the ways in which digital health is influencing health and life insurance are considered. First, a simple insurance value chain – the entirety of functions ranging from insurance policy sales to claims payment – needed to create a seamless interplay between consumers, providers and payers to produce services is outlined (see Figure 7). Where possible, each stage of the value chain (while acknowledging that these stages are interlinked) is explored through the limited literature available. Any gaps in understanding are filled with expert input and findings from an online qualitative survey of insurers and providers from a number of countries.
Figure 7: The maturity of digital health applications across the value chain
Claims processing
Managing providers
Consumer engagement
Underwriting
Marketing & distribution
Online product Simplified/automated Real-time data Data for ongoing Real-time health promotion and sales underwriting using to monitor customer monitoring, vetting data to observe care through corporates online health and satisfaction, retention and processing provision patterns and consumers lifestyle data and lapses of claims
Source: The Geneva Association
5.1. A value chain perspective
Voluntary health and life insurers face an inherent challenge from informational asymmetry leading to adverse selection, whereby consumers who are more prone to risks buy coverage and the healthy opt out.86 This often leads to a rise in the average risk borne by insurers. It may be possible for digital health to help counter these challenges
22 www.genevaassociation.org to some degree. From a value chain perspective, some insurers Dacadoo: The convergence of life may use more targeted online marketing and distribution to attract previously untapped cohorts to achieve more balanced insurance and digital health risk pools. Others may apply greater precision in underwriting using data provided by digital health to provide transparent Founded in 2010, this patented virtual health and adequate coverage to those more at risk of ill health. score platform is based on 300 million person- While there is a scarcity of evidence examining the impact years of clinical data. The platform generates a of digital health on information asymmetry and adverse holistic and independent health score, integrating selection, early trials and operational literature from some GA data on consumers’ health with their mental member companies hold some signs of promise. well-being and lifestyle (such as activity, nutrition, sleep and stress). The score serves as a proxy indicator for a consumer’s health status Early signs of adoption of digital health that is used to design personalised insurance suggest an increase in the volume of solutions to incentivise a better lifestyle. sales through added-value services. Today, Dacadoo’s health score platform serves some of the leading life and health insurance operators globally as a B2B to track consumers’ As discussed in the previous sections, the role of digital health in real-time. The platform also engages health in life and health insurance is mostly concentrated consumers directly through an AI-based lifestyle on marketing and distribution, and often aimed at navigator, which has 4,000 healthy rules consumers directly to improve their experience through around activity, nutrition, sleep, stress etc. new products and better services. Early signs of adoption and is supported by its own risk engine, which of digital health suggest an increase in the volume of scores mortality and morbidity in real time. By sales through value-added services. For instance, pairing combining the 'classic' life tables with real-time existing dementia insurance products with a preventative lifestyle data, the programme enables insurers eye tracking mobile app helped Dai-ichi Life monitor to bring more granularity to their understanding the risk of dementia among policyholders as well as of risks associated with poor health and lifestyle, meet its sales target just six weeks after the programme and thereby create not only classic life insurance was launched in 2018.87 For Ping An, the expansion of products but lifestyle-driven policies. its online health portal, Good Doctor in China, resulted in 66.9 million active users on a monthly basis and a 88 more than 50% increase in revenue in 2019. Similarly, Conditional underwriting in Brazil a collaborative programme by AIA and Vitality in Asia that started in 2013 with just two markets has to date Winsocial, a Brazilian startup in partnership with expanded to 10, with a 50% growth in AIA’s sales since Mongeral Aegon, offers renewable life insurance 2017.89 Data from Singapore, Thailand and Hong Kong also to diabetic consumers in return for maintaining showed that AIA Vitality members were more likely to a healthier lifestyle and blood glucose within repurchase insurance compared to non-vitality members recommended limits, often at discounted (by 53%, 11% and 63%, respectively), thus the programme premiums. Application for coverage is through a also has a positive effect on consumer engagement. In mobile app. The agility of the product has led to Thailand, the data point to a 10% improvement in lapses a wider spillover effect, with more non-diabetic and 32% improvement in premiums lost.80 For Vitality users joining the programme and thus growing the U.K., the figure stood at 50% fewer lapses.90 market with an innovative value proposition.
Underwriting in health and life insurance is a time- intensive process requiring extensive paperwork and a physical examination of applicants. It may also have a Automated underwriting in Singapore negative effect on consumer experience and engagement, depending on the speed and nature of the application. For MetLife’s Vitana programme has initiated a instance, a trial by Aegon insurance attempted to shorten blockchain-based insurance solution to cover the process by mapping the typical questions asked by gestational diabetes in pregnant women. The an insurer against the U.S. National Center for Health solution automatically and securely connects with Statistics to understand the risk of mortality against medical records through an app for parametric the national data set.91 Only 10 questions emerged as underwriting with instantaneous feedback on ‘significant predictors’ for mortality besides gender and eligibility and an automatic payout on diagnosis, age. In many cases, physical examination also proved without the need for a manual claims process. to be unnecessary unless the applicant belonged to a
Digital Health: Is the euphoria justified? 23 certain risk threshold. These early findings may pave engaged policyholders as well as 15% lower medical the way for digitalising and fast-tracking life insurance costs and a 4% lower loss ratio.94 Other studies have applications using pre-determined risk thresholds for associated the programme with reductions in admission the vast majority of consumers. Linking life and health rates (10%) and the length of hospital stays (25%) in insurance underwriting to wearables and sensor data South Africa, where the programme has been operational may bring additional benefits; for instance, data from for nearly three decades.95 Similarly, in the U.K., the the Aegon trial also showed that the risk of death is 88% programme showed a 44% decrease in claims cost if higher in those who exercise less than one hour a day engaged members exercised five days a week compared compared to those with active lifestyles. In the same vein, to one day.94 In a more recent study, the programme a Munich Re study found that besides routine indicators noted substantially lower claims from highly engaged such as age and smoking status, the number of steps members for cancer, gastrointestinal diseases and CVDs taken per day was the second most important indicator in particular.96 While the programme is not exclusively for understanding mortality risk for any person under the digital, its incorporation of an online and offline care mix age of 65.92 As such, some life insurers are testing the use with incentives may explain some of these efficiencies. of sensor-supplied data to bring more granularity to their Early evidence from low-income settings where the health underwriting techniques as well as incentivise healthier protection gap is substantial also appears to be favourable. lifestyles and grow their market through a previously For instance, through the integration of AI-supported untapped cohort. telemedicine and microinsurance, Telenor Health in Bangladesh has lowered the average length of the claims payment process to eight days compared to 50 days "We don’t have access to detailed (market average) with a loss ratio of 55%.97 medical results unless there is a query However, the broader literature alerts us to other possible on a claim, so the right to access data scenarios. In a study of 35,000 patients in a Massachusetts- from wearables, teleconsultation etc. is based Accountable Care Organisation (ACO), Cohen et al. found that virtual care reduced the need for physical difficult." (Insurer) visits in the early phases of implementation by as much as a third, but the results were not sustained beyond a year.98 Moreover, it led to an 80% increase in overall care Digitalisation can also have multiple effects on claims. episodes (both virtual and physical). The authors’ focus on With an increase in preventative care, insurers may see neurological services may be one reason for this weakening longer-term benefits in terms of number of claims, as well demand for virtual visits over time as services such as as advantages associated with employing digitally-enabled these may require complex, face-to-face intervention simpler claims processes. In addition, claims data can be used compared to simpler routine checks. Moreover, in an to scrutinise the utilisation patterns of consumers as well as environment where fee-for-service is the most prevalent the undersupply or oversupply of care to actively manage form of reimbursement, such as the U.S., there may be providers. At present, however, there is a lack of publicly little incentive for providers to curtail physical visits or available literature that directly links digital health to impacts to moderate the overall volume mix of online and offline on health and life claims or the management of care provision. care, thus causing the insurer to reimburse more over time. The absence of the latter may be a direct consequence of the Similar patterns have been reported in Germany for a heart challenge posed by data silos, meaning neither the insurer failure programme, where early improvements in hospital nor the provider has access to joined-up data sets to enable utilisation in a low-risk population aided by telehealth were them to buy or supply care more strategically. As such, not sustained over time and led to an overall increase in commentators point out that a shift to strategic purchasing of admission and healthcare costs. However, the initiative did care can only happen when 'more interoperability is realized'.93 have a positive effect on mortality.99
"Just imagine that 10 diabetic patients In an environment where fee-for- are offering the same doctor their blood service is the most prevalent form of sugar readings on 10 different apps? It reimbursement, such as the U.S., there cannot work." (Insurer) may be little incentive for providers to curtail physical visits or to moderate A review of the non-academic literature, while limited, the overall volume mix of online and suggests some positive effects of digital health on claims and costs. The Vitality programme has shown a persistent offline care, thus causing the insurer to improvement in mortality by more than 50% for highly reimburse more over time.
24 www.genevaassociation.org Notwithstanding the limited evidence, some explanations "Digital health is allowing us to for these results may lie in the ecosystem factors in which transform from being a claims payer the programmes operated. For instance, substantial change in the claims costs of health and life insurers from to a health and well-being partner for digital health may only be realised when due consideration our members. By capturing data from is given to the nature of services it is used for (routine vs. complex that require in-person intervention), the wearables and other devices, [we] can target cohort, provider incentives and the length of time track the health of its members and the programme has been operational. It may also be the provide care and prevention advice case that overall utilisation rises initially because digital health is better able to identify previously undiagnosed in real time. By pre-empting health cases where intervention would be necessary. Regarding risks, [we] will not only help members the digitalisation of other claims processing functions, blockchain technology has enabled simpler claims processing stay fit but will also save huge costs and fraud detection for life insurers100 and is estimated to involved in the treatment of certain improve the consumer claims handling experience by 20% conditions." (Insurer) and claims expenses by almost 25–30%.101
5.2. Online survey results What opportunities did insurers feel To complement the findings of the literature review, digital health can offer? an online survey was designed and shared with 11 insurance companies and 20 digital health providers • Increase growth and penetrate untapped using a purposive sampling technique. The survey markets (including geographic reach) was live between 31 August and 16 September 2020. • Improve customer experience, satisfaction and Health providers were included in the survey to explore loyalty perceptions and assess gaps in the market. Overall, the • Expand customer user base, new distribution survey results confirm most of the findings from the and sales channels literature review. • Bring health into people’s daily lives • Real-time, accurate data collection "Our overall goal is to improve access • Agile ways of working, allowing swift to quality healthcare. This is achieved responses to opportunities and challenges • Cost reduction through leveraging technology as an • Claims management/control enabler of healthcare and coupling • Product diversification, addressing gaps it with expert physicians on a global and collaboration with new stakeholders to basis." (Provider) develop additional products and services
Source: The Geneva Association 5.2.1. Digital health strategies and opportunities
The insurers with a digital health strategy (64%, n=7) Insurers were asked to identify up to 10 problems digital mainly focused on growth and diversification and health was solving or problems they would like it to improving customer experience. In the case of providers, solve in the future (Table 3). Overall, the results aligned all of whom had a strategy (100%, n=20), the majority with the findings of the literature review, with insurers focused on customer experience (n=16) and growing focusing on NCDs (mostly obesity, diabetes and cancer) market share (n=14), thereby confirming the trends seen in and well-being. Insurers gave a wide range of responses, the literature. predominantly on addressing health issues and promoting wellness (which may indirectly prevent/reduce NCDs, Most insurers felt that digital health was a priority and had e.g. step-monitoring apps), with only a few highlighting the potential to complement their existing activities. how digital health could support the financial aspects of insurance or the potential of data management in products and services.
Digital Health: Is the euphoria justified? 25 Table 3: Problems that digital health can help solve
Theme (# responses) Problem (# responses)e Obesity (3); diabetes (3); cancer (3); dementia (2); heart disease/cardiovascular (2) hypertension (1); NCDs (17) hyperlipidaemia (1); asthma (1); cerebrovascular (1) Disease management (2); disease prevention (2); health advice and guidance (2); pregnancy support (2); COVID-19 health counselling (2); critical disease (1); orphan diseases (1); primary care (1); treatment Health (19) follow-up (1); health information (1); chronic disease (1); musculoskeletal (1); online GP consultation (1); telemedicine (1) Mental health (11) Well-being (3); anxiety (2); stress (2); mental health areas unspecified (2); depression (1); early detection (1) Healthy lifestyle (2); physical activity (1); nutrition (1); sleep hygiene (1); alcohol (1); addiction (1); healthy Lifestyle (11) ageing (1); environment-related diseases (1); behavioural change (1); eating disorders (1) Data (5) Data sharing (1); digital payments (1); fraud management (1); external parties (1); customer analytics (1) Access to advice (2); medication delivery (2); second opinion (1); personalised plan options (1); convenience Other (9) (1); one-stop platform (1); healthy workplace (1)
Source: The Geneva Association
Several respondents, both insurers and providers, touched NCDs (including diabetes, cancer, cardiovascular and on the impact that the COVID-19 outbreak is having on respiratory diseases and dementia). All insurers’ platforms the provision of digital health. Most felt that the pandemic (n=8) provide wellness and protection services. Of the has accelerated the growth and adoption of digital health, provider platforms, the vast majority (88%, n=15) provide particularly telemedicine, but some were uncertain about treatment and management, with 12 also providing the sustainability of the environment following the end of wellness and prevention services (71%). the outbreak.e Both insurers and providers highlighted a range of other 5.2.2. Current digital health platforms services their current platforms provide to users. For the insurers (n=7), these included healthy lifestyle and well-being Almost three quarters of insurers (73%, n=8) and 85% support, insurance protection and health and condition (n=17) of providers currently have a digital health management. For providers (n=11), platforms focused on platform. Five of the eight insurer platforms (63%) diet therapy, general medicine/primary care and pre-hospital provide multiple services. Of those with a platform, care, dermatology, traditional Chinese medicine, obstetrics, the dominant focus for both insurers and providers is paediatrics, urology and adverse drug reactions.
Figure 8: What is the target age group?
Number of digital health products per age group
18
16
14
12
10
8 FREQUENCY 6
4
2 Insurers 0 Providers 34 years or under 35-55 years old 55-70 years old 71 and above
Source: The Geneva Association e As insurers were asked to identify a list of problems, the total number of answers add up to more than 11. We have also presented raw data without bundling some of the areas to avoid misinterpretation.
26 www.genevaassociation.org The older population is the main driver Marketing and distribution of insurance costs, as individuals in Insurers most frequently reported that digital health had this category are most at-risk of NCDs. enabled them to improve their marketing and distribution, Without effectively involving them in including efficient targeting of consumers (n=10, Figure 9). While this is a start, there is an opportunity for digital health, potential cost reductions digital health to have a broader impact on activities and are likely to be limited. products, as identified in the preceding sections.
Consumer engagement The target age groups reported by both the insurers and providers (Figure 8) are in line with the findings from the Most providers felt that digital health had not yet been literature review. The majority of respondents focus their optimised across the patient journey. This is because digital health product towards younger populations (under healthcare is heavily reliant on integrated systems. the age of 55). The older population is the main driver of Providers highlighted a lack of integration, as well as insurance costs, as individuals in this category are most at- disjointed systems with breakpoints between apps, human risk of NCDs. Therefore, without effectively involving them clinicians and health services, as ongoing challenges. One in digital health, the potential cost reduction is likely to respondent felt that most digital health solutions have been be limited. That said, if insurers and providers aim to pivot just a substitution for existing, paper-based healthcare. towards ill-health prevention and behavioural change, long-term health benefits may be derived from targeting Others were more optimistic, feeling that it is a work in young people and maintaining contact throughout the progress, and as healthcare stakeholders become more lifespan. Providers in the survey identified the need for comfortable with digital health, adoption will increase. a blended health package – a combination of digital and However, several providers highlighted that insurers and offline services – as there are some areas/conditions that other stakeholders are slow to adapt, which has meant will require in-person diagnosis and treatment, in keeping that the usage and uptake of digital health is still low. As with the findings from the literature. one Hong Kong-based provider states:
5.2.3. Digital health influence across the value chain "In Hong Kong, digital health is an evolving Both the literature review and the survey responses from area of development. Various tools and insurers and providers suggest that, to date, the uptake of digital health required to benefit a broad array of systems have been developed by start-ups insurance functions appears to be limited. and established players in the market, but few have yet been substantially adopted in the wider market." (Provider)
Figure 9: How did insurers perceive the impact of digital health across the value chain?
'Digital health has helped us to improve...'
Marketing and distribution
Consumer engagement
Underwriting
Managing providers
Claims processes
Other administration
0 2 4 6 8 10 12
Source: The Geneva Association
Digital Health: Is the euphoria justified? 27 There are significant opportunities, especially in Underwriting integrating multiple providers, for providing a centralised system where consumers can manage their health data Underwriting effectiveness was rarely mentioned by and information. However, as with any new technology, insurers (n=3 Figure 9). This mismatch between the survey systems integration takes time. Echoing the findings from responses and the innovative opportunities outlined in the the literature review, providers emphasised the need to literature may be reflective of the fact that insurers might incorporate incentives and motivation to bring about have other priorities when it comes to digital health. It may lasting health improvements and behavioural change. also reflect the challenges posed by data interoperability The need for a shift towards patient-centred, tailored outlined in the literature and the need for new talent and healthcare was also noted by several providers. comprehensive investment in time and human resources to make a substantive move in this direction.
"Patients want to be informed, engaged, Managing providers and claims processes and connected to all the stakeholders While around two thirds of insurers (64%, n=7) felt that within the healthcare system in order digital health offered the services they needed, almost to become an expert in their treatment all providers felt that the utilisation of digital health has not yet been optimised (80%, n=16). Insurers who felt pathway. Therefore, healthcare that current digital health initiatives did not offer the providers will need to focus more on solutions they wanted highlighted difficulties in adapting products to different contexts and turning a concept into how to become customer-driven, an enterprise-wide solution, and challenges in finding placing the patient at the centre of his or solutions that do not require the involvement of the her own medical journey." (Provider) national healthcare system. Most providers’ platforms were paid for by insurers (n=14) and used a fee-for-service model (n=11). The risks The few providers who felt that digital health has been of this model, discussed in the literature review, include optimised in practice mentioned the round-the-clock the fact that providers are likely to prioritise revenue availability of services, accessibility of online information, maximisation and there is little incentive for reductions reduced waiting times and increased accuracy of triage as in or rationalisation of in-person visits. This generates strengths. an increase in both physical and virtual care, leading to overall growth in utilisation.
Figure 10: Who pays for digital health?
Proportion of provider revenue reimbursed by a third party
9
8
7
6
5
4 FREQUENCY 3
2
1
0 <25% >25% > 50% > 75%
PROPORTION
Source: The Geneva Association
28 www.genevaassociation.org If providers are targeting users Similar to underwriting, the impact of digital health on directly, there are few opportunities claims was rarely mentioned by insurers, and improving the claims ratio was highlighted only once as a potential to vet solutions, such as those impact of digital health on the value chain. conducted by third-party payers, to ensure product standards. Consumers 5.2.4. Barriers to digital health may therefore be exposed to poor- Survey respondents were asked what they considered to quality, ineffective products. be the barriers and risks to the effective implementation of digital health. Barriers were identified from both internal and external perspectives. There were commonalities between responses from the providers and insurers, Providers either had most of (>75% n=8) or little of several of which were also reflected in the literature (<25% n=7) their revenue reimbursed by a third party review. However, there were also marked differences in (Figure 10). Such polarisation raises concerns around the perceptions in some cases. quality of available digital health products. This was one of the central findings of the literature review, particularly for mental health platforms. If providers are targeting "Insurance companies have been known users directly, there are few opportunities to vet solutions, for their traditional ways of working such as those conducted by third-party payers, to ensure product standards. Consumers may therefore be exposed and bringing a change in processes and to poor-quality, ineffective products. There are also shifting organisational culture to agile repercussions for cost inflation as consumers are at risk of more OOPs where providers directly charge users. ways of working is challenging." (Insurer)
Telemedicine consultation
Digital Health: Is the euphoria justified? 29 Internal barriers Insurers and providers • Challenges around resources and budget restrictions. • Providers felt that there was a lack of understanding of the importance of digital health; insurers mentioned resistance to change from some stakeholders and challenges in changing mindsets. • Legacy systems pose barriers to the rollout of new technology and the costs of migrating and integrating systems. Insurers Providers • Distribution readiness, slow adoption by distribution • Appropriate revenue generation, payers underpaying channels. solution providers: 'partners want a 'mansion' but are • Product integration, lack of standardisation/integration only willing to pay for a 'shack'.' between processes and IT interfaces and the absence of • Misaligned interests amongst providers create digital engagement platforms from leading insurers. disincentives to work together. • Data analytics, secure data management and • Risk-adverse culture of insurers/organisations. maintaining data integrity and accuracy in migration. • Conservatism of physicians, lack of understanding of digital health in the medical community. • Technological delay of the industry, with immature technology in some areas. Source: The Geneva Association
External barriers: Insurers and providers • Lack of confidence and trust in digital health, particularly among older people. • Inclusion of older cohorts, who are more likely to require health services. • Regulatory frameworks and a lack of clarity limit digital health services. National governments are slow to respond to the new digital health environment. Increased demand for non-contact health services during the current pandemic may drive changes to government policy, but this is by no means certain. Insurers Providers • Access to data, data sharing and security concerns for • Lack of reimbursement/challenges in current payment customers. Healthcare providers tend to lack data- models for services that do not reflect the true costs. sharing/protecting capabilities. Payers prioritise cost-saving over patient outcomes. • Consumer expectations are driven by experience in • Lack of alignment between medical provider and other industries (retail/entertainment). This may create insurer/payer for efficient patient care. a perception-reality gap for consumers if the product • Fragmented market with many digital health providers does not deliver a similar experience. in competition. • Entering new and emerging markets where a proportion • Lack of integration, inflexibility of external partners. of the population does not have internet access. Source: The Geneva Association
"Despite digital progress made within "For large scale digital health adoption, healthcare, the current reimbursement it will be critical to ensure that patients system is based on a fee-for-service will be reimbursed, physician time is following a face-to-face meeting with appropriately valued, and health insurers the clinician. This leads to a paradoxical will provide consistent reimbursement in situation since new technologies reduce a timely manner." (Provider) face-to-face interactions whilst the current reimbursement system urges the opposite." (Provider)
30 www.genevaassociation.org 5.2.5. Risks of digital health
Respondents were asked what they perceived to be the risks of digital health adoption Insurers and providers • Data issues, including security and potential attacks/breaches. • Potential complaints about the handling of personal information. • Inadequate safeguarding practices. Insurers Providers • Digital health systems may be highly complex, and so • Digital health lacks the human touch of medicine. Some there is a risk of coordination issues in the system. conditions require in-person diagnoses and treatment. • If the system is a single source, disruption in one part of Digital health should not replace the doctor-patient the business can put the entire value chain on hold. relationship. • Workforce transformation and adoption of technology • As the barriers of entry become less challenging, more may not happen at the same speed as the digitisation companies will enter the digital health space. There may of business processes, which will exacerbate over- be an increase in the number of companies who market utilisation of resources. products that are not based on proven science. Source: The Geneva Association "The largest single risk is that the classic operators have not been moving forward fast enough and the big digital brands such as Amazon, Apple, Facebook and Google will most likely take a very large part of the global ‘private’ life and health premium, as they will integrate their digital brands around new insurance products." (Provider)
Portable self-testing device for blood coagulation
Digital Health: Is the euphoria justified? 31 6. Recommendations: Where to go from here?
This report poses three fundamental questions: 1) does the insurance industry address the informational asymmetry in the digital health market; 2) does it have a holistic strategy to embrace digital health; and 3) does it have the capacity to roll out digital health? Our preliminary conclusions are sobering and a little provocative. With countless apps, telehealth solutions and sparse evidence of effectiveness, the market remains fragmented. This makes it hard for consumers to get the quality signals they need to choose effective products and for payers to steer away from ineffective solutions. The literature review and survey results also indicate that the majority of players are yet to adopt a holistic approach towards digital health. It may therefore be fair to infer that digital health still has some way to go in terms of delivering quantifiable benefits on a larger scale by going beyond the young and the healthy. Successes in distribution and marketing, with some incremental adaptions of insurance products, are evident; however, they are far from being transformative. To address this, we propose six areas where insurers, at both the company and industry level, can shape the digital health market to optimise its societal benefits alongside realising new business opportunities.
Articulate a holistic digital health strategy
At present, there is no resounding vision that emerges from the literature that clearly articulates how health and life insurers need digital health and vice versa. Evidence also suggests that the overall maturity of using digital health across the value chain remains low and while there are innovations, few have achieved scale. Amidst the COVID-19 crisis, health systems globally came under renewed pressure to adopt digital health. It is therefore important to get past the euphoria of gadgets and appraise more holistically the business and societal opportunities that arise from digital health for insurers to enable them to add value to the consumer experience while also driving efficiency.
It is important to get past the euphoria of gadgets and appraise more holistically the business and societal opportunities that arise from digital health for insurers to enable them to add value to the consumer experience while also driving efficiency.
32 www.genevaassociation.org Is digital health a tool to aid marketing and product Attention should also be given to creating the right distribution to previously untapped cohorts, or could reimbursement model that works to optimise an online- it be used to add value to the lives of older or high-risk offline care mix to increase clinical and cost efficiencies. consumers? While focus on the young, general prevention and wellness is welcome for longer-term gains, most societal and claims costs are attributable to the long- Market forces alone will not be term management of conditions. What can insurers do to sufficient to steer services to the right achieve the integration of prevention and management solutions? These are just some of the high-level questions people and places or towards greater that require workable solutions at the company level. efficiency. Marshal the evidence prior to purchasing digital solutions Many payers globally have embraced innovation in payment methods to tackle supplier-induced demand The insurance industry is in a strategic position to drive or risk selection in health. Performance-based payments the digital health industry toward impactful products have been in use to improve the quality or incentivise and services through purchasing power. While the volume for a defined set of services. Similarly, capitated lack of longevity of many digital initiatives discussed global budgets or bundled payments are in use in many in this report impedes us from drawing any clear-cut European health systems to tackle oversupply. Can conclusion about their long-term impact, having clarity insurers adapt these reimbursement models for digital on what changes insurers would like to see and taking health applications and shift away from the current steps to measure them are important places to start. dominant fee-for-service payment model? If digital health service providers begin to share some of the Impact should be considered in terms of value to risks of rising health costs through global budgets or consumers and payers. This includes clinical outcomes, bundled payments, they may be incentivised to develop cost of care and access to care, and not just care episodes. more efficient service offerings. Similarly, developing In order to be impactful, digital health providers should metrics that capture both the economic value of digital clearly articulate, study and report on the specific applications and the health and convenience benefits conditions and populations they seek to impact. for consumers could help insurers negotiate prices more effectively and fairly. Insurers can move away from being passive claims payers to strategic purchasers of services only by associating with Prioritise trust through voluntary charters digital health products that demonstrate prior and ongoing clinical and economic impact. There are two dimensions to The future growth of digital health applications is achieving this goal. Firstly, insurers need to devote more largely dependent on the willingness of consumers to time to detailed claims analysis so that digital services share private data, often of a sensitive nature. There can be targeted to achieve the best outcomes for both the are already examples of regulatory standards that aim customer and the insurer. Secondly, they can work with to improve the effectiveness and data governance of digital health companies and academics who have already and enhance trust in digital health. These include the set out novel means of collecting, studying and reporting precertification programme by the U.S. Food & Drug on the impact of digital health solutions.102 This would mark Administration or the Evidence Standards Framework a significant shift from the sales or marketing focus that we for Digital Health Technologies in the U.K. developed see today and would require insurers to be more clinically- by the National Institute of Clinical Excellence. The led than they are currently. insurance regulatory community is also honing in on the use of new technologies, such as algorithms and Big Align payment incentives for digital health providers Data Analytics (BDA),104 to define risk categories and prices and there are a plethora of regulations that vary Digital health providers already face strong incentives to by jurisdiction. However, voluntary data sharing through innovate to sustain themselves in this dynamic market. mobile apps remains a grey area. Market forces alone, however, would not be sufficient to steer services to the right people and places or towards While regulatory initiatives may be a step in the right greater efficiency due to well-known market failures in direction, these initiatives alone will not be the ‘ultimate healthcare. Evidence shows that while people above the trust builders’. A survey conducted by Harvard Business age of 55 drive most healthcare costs, digital initiatives Review103 indicated that ‘trust is an essential facilitator’ supported by insurers or providers mainly focus on younger for firms to ‘earn’ access to customer data and pointed cohorts. Equally, there are some indications that digital out that being open and transparent is likely to influence health alone may not be enough to lower unnecessary face- the extent to which providers or applications are trusted. to-face visits, especially in a fee-for-service environment. A possible approach is a combination of the industry’s
Digital Health: Is the euphoria justified? 33 compliance with relevant privacy and data protection limited progress with data sharing, which makes it harder regulations with the development of voluntary charters to drive out ineffective solutions from the market. that puts consumers at the centre. These could be implemented at the country, regional or global level and It is now timely for insurers to convene key stakeholders act as a starting point for agreeing on some ground rules such as governments, investors, providers, health tech related to privacy, transparency, societal well-being and companies and pharmacies and set up a collaborative accountability that insurance companies can endorse platform for a nuanced approach to digital health – one and use to differentiate themselves from the rest of the that respects competition but does not reduce quality. market. Such charters could also constitute a platform to The health and life insurance industry, in collaboration involve, sensitise and communicate with consumers. with others, can unlock significant value by creating a ‘digital health marketplace’ that brings relevant Recognise organisational context and improve capacity digital and in-person solutions (e.g. symptom checkers, telemedicine, appointment booking for in-person visits) While the industry recognises the importance of health together, keeping outcomes at the core and focusing on and wellness data for customer impact and product quality at affordable cost rather than just utilisation. design, the position of each insurer on its path to digital This shared market place can facilitate a much needed transformation needs to inform goals, approach and rationalisation of products by creating common timelines. That way, realistic expectations can be set. standards (e.g. a health outcomes database), effectively Organisational impediments and support systems need to leveraging experiences and offering a unified voice while be considered. For instance, what kind of talent is required working hand-in-hand with governments on crucial to bring together a more joined-up approach to health topics like data and security and keeping a clear focus on and life insurance products through digital health? What customers’ health needs. levels of IT budget and resources are available? What is the current approach to data structure and interoperability and is there a single point of data and analytics The health and life insurance industry, management? How is the underwriting and pricing in collaboration with others, can organisation structured and what is its openness to new data sources? Limitations arising from data governance unlock significant value by creating and issues related to interoperability and standardisation a ‘digital health marketplace’ that are highlighted consistently in the report. Solving these would require well thought through collaborations brings relevant digital and in-person with governments and providers, as seen in countries solutions together, keeping outcomes like Estonia. Prior to that, as a stepping stone, insurers will need to consider the barriers and desired solutions at the core and focusing on quality at internally in order to initiate a broader dialogue. affordable cost.
In addition to the above, channels and products would also require new ways of thinking. Health and wellness data are very relevant in a competitive context of simplified products and a direct-to-consumer market but less so for complex products that have an investment angle and are sold through agencies, banks or brokerages. For instance, what would a digital interface look like with intermediaries? Related to this, critical issues such as cybersecurity and data protection need to be properly analysed and not bypassed to make a stepwise change in the ecosystem.
Create a digital health market place
The gap created by slow economic growth and high medical inflation, exacerbated by COVID-19, will bring added pressure to public spending on health. At the same time, most evidence suggests that digital health solutions – notionally aimed at improving access, affordability and efficiency – are fragmented and lack scale and reliable data to measure their efficiency and effectiveness. While there have been pilots there is
34 www.genevaassociation.org 7. Closing remarks
Health systems are likely to undergo a forceful transformation in the aftermath of the COVID-19 crisis. At the macro level, the accessibility, affordability and adequacy of the health workforce will be central themes as both the public and private sectors respond to the pandemic. At a more personal level, a renewed understanding of physical and mental well-being in a life post-lockdown are likely to increase demand for services. Digital health innovations will have to speak to both layers while bolstering consumer confidence.
The digital health market is in its infancy, but it has already made a powerful case for its existence and importance during the crisis. It now warrants serious development through a holistic strategy and a consolidation of the market. Health and life insurers should not be seen as laggards. Instead, with digitalisation, they should be the trailblazers, contributing to slow the seemingly inexorable rise in healthcare costs by reducing fragmentation and proactively managing the risk of ill health among the insured. In order to do so, the industry needs to take stock of its vision and capacity internally prior to forging targeted collaborations with others to deploy interventions at scale.
Wellness app
Digital Health: Is the euphoria justified? 35 References
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Digital Health: Is the euphoria justified? 41 42 www.genevaassociation.org Digital Health: Is the euphoria justified? iii Demographic shifts, rises in chronic illnesses, the ongoing pandemic and squeezed public budgets mean health needs are unlikely to be met solely by a brick-and-mortar health system going forward. Digital health is increasingly seen as a solution. This report analyses the effects of digital health on health behaviour and outcomes and examines how digital health is being used by health and life insurers across the insurance value chain, providing recommendations for insurers on how to scale-up solutions.
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